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SablePoint

Beach Comber
We will be at the bottom when there is no supply of homes that are being sold for less than the cost to build. A builder acquaintance in Atlanta just had to give back 7 houses. Those 7 houses will be in competition with other individual sellers houses until all 7 are gone. I see why I as a seller wouldn't want the prices of those 7 to be used as comps, I also see why I as buyer am going to use those prices to browbeat an individual seller into compliance...or not..they don't have to sell to me.

Agree that we will remain at bottom until that point.

I don't think anyone can go wrong buying a house below cost (as long as there's nothing wrong with it from an construction or aesthetic standpoint). Buying homes below cost, to me, definitely represents the bottom of the market because it can't last forever. There are plenty of buyers out there wanting to snap up properties selling drastically "below cost" in WaterColor.

Appraisers are still not supposed to use distress sales as comps. From a lender's perspective, they will be willing to lend on like properties selling for MORE than the distress prices (assuming a solid, willing, and able buyer), because the lender is evaluating it from a perspective of risk. The lender understands that the distress sale is below market, so they don't use them as a determination of market value to deny a loan (which they want to make) to a buyer.
 

elgordoboy

Beach Fanatic
Feb 9, 2007
2,526
565
I no longer stay in Dune Allen
Agree that we will remain at bottom until that point.

I don't think anyone can go wrong buying a house below cost (as long as there's nothing wrong with it from an construction or aesthetic standpoint). Buying homes below cost, to me, definitely represents the bottom of the market because it can't last forever. There are plenty of buyers out there wanting to snap up properties selling drastically "below cost" in WaterColor.

Appraisers are still not supposed to use distress sales as comps. From a lender's perspective, they will be willing to lend on like properties selling for MORE than the distress prices (assuming a solid, willing, and able buyer), because the lender is evaluating it from a perspective of risk. The lender understands that the distress sale is below market, so they don't use them as a determination of market value to deny a loan (which they want to make) to a buyer.
ok.
 

SHELLY

SoWal Insider
Jun 13, 2005
5,775
802
For example, this home just sold for $1,925,000... after selling earlier in the year for $1,700,000. It's on busy Western Lake Drive. The seller bought it in the summer, but decided he needed more room for his car collection, so he decided to sell it again. And he sold it quickly for $225,000 more than he had just paid for it.

"SaleNotes: Home sold furnished."

The way I see it is new buyer is paying property taxes on $225,000 in furniture.



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Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
"SaleNotes: Home sold furnished."

The way I see it is new buyer is paying property taxes on $225,000 in furniture.



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Unless they are paying cash, they are also paying doc stamp taxes, and mortgage taxes on that furniture, and they may also be financing the furniture over 30 years.
 

SablePoint

Beach Comber
"SaleNotes: Home sold furnished."

The way I see it is new buyer is paying property taxes on $225,000 in furniture.



.


So, as you can see, the market doesn't work like a lot of people seem to want it to. This person is probably quite happy with their new home. Whereas Shelly views them as being idiots. Either way, they represent the market.

The market is comprised of buyers who are looking for that perfect vacation home that meets all of their dreams and needs. And it's also comprised of buyers whose only objective is low price... which may ultimately be Shelly's dreaded "investulators" back in the market again!
 

elgordoboy

Beach Fanatic
Feb 9, 2007
2,526
565
I no longer stay in Dune Allen
So, as you can see, the market doesn't work like a lot of people seem to want it to. This person is probably quite happy with their new home. Whereas Shelly views them as being idiots. Either way, they represent the market.

The market is comprised of buyers who are looking for that perfect vacation home that meets all of their dreams and needs. And it's also comprised of buyers whose only objective is low price... which may ultimately be Shelly's dreaded "investulators" back in the market again!
Don't overreach :wave: the dreaded version of the "Investulators" weren't concerned with price.
 

fisher

Beach Fanatic
Sep 19, 2005
822
76
We will be at the bottom when there is no supply of homes that are being sold for less than the cost to build. A builder acquaintance in Atlanta just had to give back 7 houses. Those 7 houses will be in competition with other individual sellers houses until all 7 are gone. I see why I as a seller wouldn't want the prices of those 7 to be used as comps, I also see why I as buyer am going to use those prices to browbeat an individual seller into compliance...or not..they don't have to sell to me.

I'm not sure I have seen a house that sold for less than what it cost to build the house. I HAVE seen many homes that have sold where the value of the LOT plummeted to the point where the total cost of home and land was pretty low compared to a couple of years ago.

For instance, the home that sold in Watercolor that started this whole thread did not sell for less than the cost of building the house. Instead, the value of the underlying land plummeted. That house probably cost somewhere in the range of $600k to $650k to build (true cost--not marked up by a builder). Which means the value of the lot was $200k to $250k. The seller got full price for the house and took a beating on the lot which was purchased for $770k.
 

fisher

Beach Fanatic
Sep 19, 2005
822
76
I happen to know the seller, J & T Investments, LLC, and your math is a bit off on the cost per sf, just a weeeeeeeeeeeeeeeeeeeeeeeeeeee bit. I like the house, though. I could live in the carriage house.


Joe,

Are thinking about the right house? This home does not have a carriage house.
 

SHELLY

SoWal Insider
Jun 13, 2005
5,775
802
And it's also comprised of buyers whose only objective is low price... which may ultimately be Shelly's dreaded "investulators" back in the market again!

"Investors" = Buy value & Hold for future cashflow/appreciation

"Speculators" = Buy now at any price & Sell tomorrow at higher price

"Investulators" = Speculators claiming to be Investors & bleeding cash now

Investulators aren't coming back...the vultures see the blood and are circling.


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